Debt Consolidation Loan

It’s common for people to take out multiple credit cards and loans in an attempt to stay on top of their expenses.

This creates a financial burden which ends up making it harder for them to manage their bills.

If this sounds like you, consider consolidating!

How do I get approved with a bank?

Taking out too many loans and having a multitude of unsecured debts is considered risky behaviour by the banks.

Because of this, lenders have very strict criteria for debt consolidation loans:

Have made your home loan repayments on time for the last 6 months.

Have made credit card and personal loan repayments on time for the last 3 months.

Have never missed repayments with the bank that you are applying with.

Be in a strong financial position so that you have the ability to repay the loan.

Have a stable employment history.

Have a good credit history.

If you can’t demonstrate the above points then you should apply with a specialist lender not a bank.

Our mortgage brokers work with both banks and specialist lenders. Speak to us today on 1300 889 743 or enquire online.

How much can I borrow?

You may be able to borrow up to 90% of the value of your property (LVR).

However, if you do not have equity in real estate, you will not be able to consolidate your debt.

If you have clean credit and all of your repayments have been on time then you can borrow up to 90% of the property value.

If you have missed payments but, overall, are repaying your debts, you can borrow up to 80% of the property value.

If you have serious credit impairment or missing payments on all debts, you can borrow up to 75% of the property value.

Approval will also depend on your ability to prove that this will not happen again.

Lenders will be concerned if you are living beyond your means or are experiencing financial hardship from which you will not recover.

To mitigate this, we use various methods to explain to the lenders that this is a one off event.

If you have had serious credit impairment, then you must prove that you can afford the new loan. Otherwise the lender is just delaying the inevitable of you having to sell your property.

What if I don’t have enough equity?

There may still be some options available to you. In some cases we can apply to have part of your debt written off and the rest of your debt consolidated into your home loan.

This option isn’t available to all borrowers, please contact us for more information.

What are the benefits of debt consolidation?

There are many advantages to consolidating debt.

They include:

Making affordable repayments.

Paying lower interest rates.

Managing your debt effectively.

Freeing yourself from the stress of managing several debts.

Preventing creditors from pursuing you for funds.

Protecting yourself against the risk of bankruptcy.

Saving yourself money.

Improving your cash flow.

Living a happier life!

Financial stress can put a large amount of pressure on families and is one of the leading causes of relationship breakdown. Australians spend a large portion of their income repaying debt.

You can minimise the interest you pay and maximise your quality of life when you consolidate your debt.

Speak to us!

Managing debt is easy if you get in touch with professionals. We know how the lenders will view your situation and we will submit your application with the right lender, to ensure that you get approval.

Don’t wait until you are buried deep in debt, we can help you take control of your finances:

Yes, it is possible to refinance an outstanding tax bill from the Australian Taxation Office (ATO), however, most banks may not approve it. We can help you though and you can borrow up to 85% of the value of your property (85% LVR) with a specialist lender. Please check out the ATO debt home loan page to learn more:https://www.homeloanexperts.com.au/bad-credit-home-loans/ato-debt-home-loan/

Haase

Can you provide an example of a debt consolidation scenario? Thanks. I’m just learn about this and may consider it in the near future.

Here’s a basic example of debt consolidation: Pete has a 12% credit card debt of $20,000 and a personal loan of $25,000 at a 8% rate. After speaking with a financial adviser and a mortgage broker, he decides to consolidate these into his home loan, which he’s paying at a 5.0% interest rate. This way, Pete now has one monthly repayment with a lower interest rate allowing for great savings and a better way to manage his finances.

Andy

Hi, I have two homeloans – one for a residence and one for an investment. Last year saw the investment property go into positive gearing. My accountant suggested to borrow on the investment and pay of my loan for my residence. Is this possible? or should I be looking at consolidating both loans into one?

Hi Andy
My understanding is that that isnt how it works. It’s the purpose of the debt not what it’s secured on which determines if it’s tax deductible or not.
You can likely get a better rate on your investment if you refinance both your home and IP at the same time. Some lenders have deals where they give home loan rates for investment loans in this situation.